“The Market Will Do Whatever is Necessary to Confuse the Greatest Number of People” – author unknown
The Nasdaq Composite Index, the Standard & Poor’s 500 Stock Index and the Dow Jones Industrial Average each achieved all-time record high levels on August 11, 2016. Earlier in the year, stock prices went into a scary swoon. Multiple causal factors, offered by well seasoned investment pro’s, were given as an explanation with warnings of further weakness and rightfully put fear into the hearts of investors. For many, this fear translated into broad selling of common stocks. This is yet one more example of the futility in trying to time markets, jumping in and jumping out. More gains are foregone by trying to buy low and sell high than simply by staying the course prescribed in a well conceived and equally well executed investment strategy.
This will not keep those wrongheaded investment professionals from coming on CNBC and forecasting more doom and gloom. Invariably, some of our clients hear these prognostications and call us with genuine concern. We advise that these advisors are understandably trying to keep their clients (who have missed a very profitable period) and the only way to do so is to warn of the dangers lurking just around the corner when the soundness of their strategy and advice will prevail. We maintain that anyone that has that kind of accurate foresight would not need to manage money for anyone other than themselves! To a degree, it’s just common sense.
All questions and comments are welcomed.
Bob Bilkie, CFA®